دانلود رایگان مقاله عدم قطعیت، هزینه های نگهداری سرمایه و چرخه کسب و کار

Abstract

This paper examines how maintenance expenditures affect the occurrence of indeterminacy in a two-sector model economy, motivated by the empirical fact that equipment and structures are maintained and repaired. McGrattan and Schmitz's (1999) survey on ‘Capital and Repair Expenditures’ in Canada indicates that maintenance expenditures account for a substantial fraction of output and new investment. It is shown that the endogenous maintenance expenditures reduce the requirement of the degree of increasing returns to scale to generate sunspot equilibria. In fact, the minimum level of the returns to scale required could be as low as 1.0179. This aspect is important since empirical works such as Basu and Fernald (1997) suggest that returns to scale is close to constant.

5. Conclusion

There is evidence that suggests that expenditures on the maintenance and repair of physical capital. However, with regard to indeterminacy properties, very few papers consider such expenditures in their artificial economies. Hence, I am interested in what changes it can make to dynamic properties of an artificial economy once maintenance expenditures are considered. In this model, capital depreciation is dependent on capital utilization and maintenance expenditure. I conclude that maintenance expenditures are instrumental in generating multiple equilibria: It can make indeterminacy occur under relatively milder degree of externalities compared with its model predecessors as maintenance activities offset the capital depreciation and boost the net rate of return on capital. It has been an issue that a model incorporating both two-sector production and variable capital utilization rate will induce extremely narrow range of increasing returns. It is difficult to replicate the procyclical consumption behaviour. Therefore, I also present an alternative model where capital utilization rate is constant over time. The result that indeterminacy requires lower degree of externalities in a model with maintenance activities than a model without it is robust. Under this formation, the countercyclical consumption puzzle is solved and most features of the model moments are comparable to the U.S. data. Understanding the importance of maintenance expenditures on multiple equilibria could have implications for policymakers to improve economic welfare. As an important part of economic activity, the maintenance expenditures should be taken into account in the formation of economic policy such as interest rates which are often reckoned as agents' confidence indicator.